What Lira Savings Actually Earn: Returns vs Inflation
In a country with low, stable inflation, the difference between a 4% and a 5% return is the whole conversation. In Turkey it is a rounding error. The question that matters is whether a return beat inflation at all — and often the answer is that it did not.
Nominal returns say very little
A Turkish fund posting a large annual return is unremarkable on its own. Prices rose too. What a saver actually earned is the gap between the two, and that gap can be negative in a year when the headline return looks excellent.
This is why every fund page on this site carries a benchmark row against CPI inflation (TÜFE), published by TEFAS alongside the fund’s own return over the same period. It is the single most useful line on the page and the one most often ignored.
The three comparisons worth making
For any Turkish fund, three benchmarks between them answer most of what you want to know:
- Versus CPI inflation. Did the holding preserve domestic purchasing power? This is the real return question, and it is the one that decides whether a nominally strong year was actually a good one.
- Versus bank deposits. Was the fund worth holding instead of the default alternative? Note the tax asymmetry below.
- Versus USD or EUR. Did the holding keep pace with hard currency? Relevant if your liabilities or your reference point sit outside Turkey.
A fund can pass one and fail another. Beating deposits while losing to inflation is an ordinary outcome, not a contradiction.
The tax asymmetry
Comparing a fund return with a deposit rate directly is misleading, because they are taxed differently. Interest on Turkish bank deposits is subject to withholding tax, while returns on money market funds are not. A deposit rate quoted gross is therefore not comparable with a fund return that is already effectively net.
To make them comparable you have to gross the fund return up by the withholding rate. That is what the deposit equivalent comparison does: it expresses each fund’s return as the gross deposit rate that would leave you in the same place. The table there is updated daily, so a rate your bank has quoted can be read straight against it.
Why money market funds dominate the cash conversation
Of the 1,217 funds on TEFAS, the 51 money market funds sit in the lowest risk band and hold treasury bills, repo and short-dated bank instruments. They price daily, settle same or next business day, compound daily, and carry no withholding tax.
That combination — liquidity plus the tax treatment — is why they function as the default home for lira cash rather than a current account. It is also why they are the most useful single series for anyone trying to understand what holding lira actually costs over time.
What real return does not tell you
Two limits are worth stating. First, CPI is an average basket; your own inflation depends on what you actually buy, and for imported goods it can be considerably higher than the headline. Second, a positive real return in lira is not a positive real return in dollars — if the currency moved more than the inflation differential, a saver who thinks in hard currency lost ground regardless.
Which comparison is the right one depends entirely on where you expect to spend the money. That is a question about your circumstances, not about the funds, and this site does not attempt to answer it for you.
Where to look
- Any fund page — the benchmark block, switchable across 1, 3, 6, 12, 36 and 60 months
- Money market funds ranked by return
- Methodology — how each figure is derived, and the known gaps